Covid-19 Pandemic: Frequently Asked Questions on Employment *Updated*

On 1 May 2020, the PM announced a conditional MCO (“CMCO”) commencing from 4 May 2020, allowing a large number of economic sector and business activities to operate with strict adherence to the health standard operating procedures (“SOP”) set by the government. 

The CMCO relaxes to a certain extent the nationwide Movement Control Order (“MCO”) imposed from 18 March 2020 under the Prevention and Control of Infectious Diseases Act 1988 and Police Act 1967 pursuant to which the Government issued the  Prevention and Control of Infectious Diseases (Measures within the Infected Local Areas) Regulations 2020 (“Regulations”) which laid down the relevant regulations in relation to the movement restriction for the period 18 March 2020 to 31 March 2020. The MCO period currently is from 18 March 2020 – 12 May 2020 (“Period”). A new set of regulations, Prevention and Control of Infectious Diseases (Measures within Infected Local Areas) (No.5) Regulations 2020 have been issued and will be in force from 4 May 2020 to 12 May 2020 (“New Regulations”)

The following FAQs will hopefully assist you with some of the issues that you may be facing during the Period and in relation to the CMCO. Please note that the FAQs do not constitute legal advice and as the situation remains fluid, the legal position may change in the near future. If you require legal advice, please contact one of the lawyers in our Employment Practice Group listed below.
  1. Can employers open their businesses and/or places of employment beginning 4 May 2020?
Based on the PM’s announcement on 1 May 2020,  almost all economy industries and business activities will be allowed to operate fully beginning 4 May 2020. This approval is subject to the businesses’ compliance to the relevant SOP set by the authorities. 

The sectors listed in the schedule to the New Regulations are prohibited from operating during the CMCO. 

Please note that as of 4 May 2020, 9 states have opted not fully adopt the CMCO. Kedah, Sabah, Pahang, Penang, Kelantan and Sarawak have decided not to follow the move while Selangor, Perak and Negri Sembilan would limit the number of businesses allowed to resume operations and restrict dine-ins at restaurants and sports and recreational activities during the CMCO.
  1. What activities are prohibited from operating beginning 4 May 2020?
The list of activities which are prohibited from operating during the CMCO are as follows:- 
  1. Entertainment, leisure and recreational activities which may cause a crowd to gather;
  2. Activities relating to religious, cultural and art festivities which may cause a crowd to gather; 
  3. Business activities which may cause a crowd to gather; 
  4. Activities at a centralised labour quarters, employees’ hostel and dormitory which may cause a crowd to gather; 
  5. Fitting of clothes, using fitting rooms in clothes stores, trying on fashion accessories in stores and providing cosmetic testers in stores; 
  6. Services in barbershops and beauty salons; 
  7. Cruise ship activities, tourism services and services at accommodation premises under the Tourism Industry Act 1992; 
  8. Installation and maintenance of machinery activities (lift, escalator, boiler and others) and tower crane at construction sites in groups which may cause a gathering; 
  9. Theory and Practical Examinations for Shot-firer (Blasting) for mining and quarrying industry; 
  10. Certification for agri commodities; 
  11. Activities of financial services industry and banking, involving sales and marketing, not within the premises of financial institutions and banks, or in public places; 
  12. Commercial activities involving sales and marketing not within business premises, or in public places, not including food business at food courts, hawker centres, food stalls, food tracks and the like.  
  1. What are the SOPs set by the authorities? 
There is a different SOP for each economic sector. You may refer to the SOPs here

In general, the SOPs set out, amongst others, that employers are required to ensure social distancing of minimum of 1 meter, usage of masks at all times, frequent hand wishing with soap or hand sanitiser, performing thermal screening at entry/exit points and sanitising business premises regularly. 
  1. How do employers ensure compliance with the SOP? 
Employers are encouraged to consider and give flexibility to its employees to work from home. Employers are also encouraged to have flexi-working hours or rotation shifts for different sets of employees. Employers have the flexibility to decide on work schedules based on their business needs. 

The Prime Minister has urged employers to be more considerate to employees with children as kindergartens and schools are still closed under the CMCO.
  1. Can employees travel to the employers’ business premises from one infected area to another infected area for work?
Yes. However, if the business premise is situated in an enhanced MCO area or if the employee is travelling to and from an enhanced MCO area, then the employee will not be allowed to travel to the business premise (see Regulation 4 of the New Regulations). 
  1. Can the employees car-pool to work during CMCO? 
Yes, employees can car pool to work on the condition that he/she does not carry more than 3 passengers and such passengers shall be persons staying in the same house as him/her. 
  1. Can the employees travel via public transport to work? 
Yes, employees may use public transport to travel to work including e-hailing services. 
  1. What if the employer does not or is unable to comply with the SOP? 
Failure to comply with the SOP may result in legal action, withdrawal of operating license or any other related action. The government, in collaboration with the Ministry of Health, Royal Malaysian Police and other enforcement bodies will carry out monitoring and enforcement to ensure compliance with the SOP. Employers are advised to take all necessary steps to ensure the business complies with the relevant SOP.  
  1. Can employers deduct the employees’ annual leave entitlement or enforce unpaid leave during the Period?
Unless the contract of employment provides otherwise, the law does not permit annual leave entitlement to be set off or for employers to unilaterally require their employees to take unpaid leave.
  1. Are employees entitled to the same salary or benefits during the Period?
Yes, they need to be paid as per their contract of employment.
  1. Are employees required to pay the full salaries of their employees who cannot work from home or are not required to be on standby?
MOHR has issued FAQs (Part 1, Part 2, Part 3) stating that salaries and allowances for all employees must continue to be paid in full during the entire Period. This practice is also encouraged from a risk management, practical and even humanitarian perspective. 
Employers whose businesses are severely impacted by the situation and are unable to pay employees their full salaries employers may consider other cost cutting measures.  

While an argument may be made that due to supervening events beyond the control of both parties, the contract of employment temporarily cannot or could not be performed by either party in a fundamental way and as the employee was not able to fulfil the obligation to work, the employer is not required to fulfil its obligation to pay during the Period, this position has significant legal and practical risks  especially in view of the public position taken by MOHR.  We recommend that legal advice be obtained in dealing with potential measures that can be implemented to reduce costs.
  1. What about employees currently on sick leave and maternity leave?
A maternity leave period that overlaps with the Period will not affect the employee’s entitlement to or the duration of the maternity leave. If the employee is on sick leave, the employee may not be required to work from home and the sick leave would be deducted from his or her normal entitlement.
  1. Can employers require their employees to come back to work during the CMCO if the employers’ business is permitted to operate?
If the nature of your business does not fall within one of the restricted activities listed or your business is not in one of the states which is not adopting the CMCO, your business can operate subject to compliance with the relevant SOP issued by the government. As such, if your employees have been granted approved annual leave during the CMCO, and if the needs of the business make it necessary, you may revoke the approval of the annual leave to require employees to return to work. 

Employees in non-essential departments or aspects of your business are encouraged to be allowed to work from home instead of being present at the work premises.
  1. Can employees travel on business during the Period or CMCO period?
Employers may not require their Malaysian employees to travel out of country during this Period. There is no similar prohibition on travel out of Malaysia for foreign employees.
Employees who are required to travel inter-state for work purposes are required to apply for permission from the Royal Malaysian Police.

Under the guidance from the National Security Council and the Immigration Department, foreign employees (and their dependents, where applicable) in possession of valid work passes or foreign nationals possessing Long Term Social Visit Passes are not allowed to return to Malaysia but are exempted if they are employees of essential services businesses. A letter of confirmation from the employer is required for this purpose and must be furnished to the Immigration Department of Malaysia upon entry into Malaysia. They will be subject to healthcare screenings and quarantine at designated quarantine areas.

There are no restrictions on foreign nationals remaining in employment in Malaysia.
  1. How should employers deal with Malaysian employees returning from abroad?
All Malaysians, Malaysian permanent residents or expatriates (under permissible circumstances) who return to Malaysia during the Period are required to undergo a health examination upon arrival and will be required to undergo quarantine at a designated quarantine area for 14 days. During this period of quarantine, regardless of whether it overlaps with the Period, employers may not require the relevant employees in question to attend the workplace. The same principles regarding annual or unpaid leave will apply during the quarantine period.
  1. Can employers retrench, temporarily lay-off and/or impose pay cuts as cost-cutting measures?
Yes, employers facing financial difficulties as a result of the Covid-19 pandemic may find it necessary to reduce its business costs and expense by amongst others undertaking retrenchments, lay-offs and/or pay-cuts.
Retrenchment should be in accordance to the general principles of industrial law, and retrenchment benefits may be payable. Temporary lay-offs and salary reduction may only be done after consultation and with the consent of the employees. Lay-off benefits may be payable under the Employment (Termination and Lay-Off Benefits) Regulations 1980. Where there is a collective agreement in place, all such action shall be taken in compliance with the same.
Separate from the MCO, where cost cutting measures include a period of at least 1 month where employees will not be paid/ placed on unpaid leave, the PM has announced on 16 March 2020 that employees may be able to claim RM600 per month for a maximum period of 6 months.  The application forms may be downloaded here
  1. Is the Lembaga Hasil Dalam Negeri/Inland Revenue Board (LHDN) giving any accommodation to submission and payment of tax?
Yes, LHDN has agreed to grant extra time for certain matters as can be seen here. Amongst other things, LHDN is providing a time extension of 2 months  to all taxpayers who need to submit their tax declaration forms between March and June 2020.  This extension would also apply employees who would otherwise be required to submit their BE Form by 30 April 2020.
  1. Are employees entitled to withdraw their EPF savings as a result of the Covid-19 pandemic?
Based on the Prime Minister’s announcement on 23 March 2020, beginning 1 April 2020, all employees below the age of 55 may withdraw the maximum amount of RM 500 per month for 12 months from their respective EPF Account 2.   

This benefit is in addition to employees’ temporary ability to reduce EPF contributions from 11% to 7%. 
  1. I have just discovered that one of my employees tested positive for Covid-19. What should I do?
Employers must instruct the employees who came into close contact with the positive employee to quarantine themselves for 14 days. According to MOHR FAQs, employers may not cut the affected employees’ salaries during this period of quarantine or place them on unpaid leave. They may however be required to work from home.
You will also have to undertake disinfection of the work place in which the affected employee had worked; and if the work premises are in a common space or a shared office building, you must inform the building management of the same.

For suspected Covid-19 cases, employers must immediately report to the nearest Ministry of Health’s office. As part of the SOP for CMCO, employers are required to create a Emergency Response Protocol Committee to manage emergency cases and bear the health screening costs (if it is needed) and the costs of disinfecting the work place.

The Skrine Employment Practice Group is monitoring the relevant developments and will from time to time issue updated FAQs.

Please contact the following if you have any queries :-  
Siva Kumar Kanagasabai
Selvamalar Alagaratnam
Foo Siew Li

Sara Lau Der Yin
Senior Associate

Tan Su Ning
Senior Associate

Chen Mei Quin

Corrinne Chin May Suet